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Policy and technology: a "longue durée" view

Random thoughts on policy for technology and on technology for policy

Startups, servitisation and space

home-delivery

One can’t spend a day without discovering a new app or online service that delivers something at home. It’s not just the explosion of food delivery, which is today one of the most crowded startup markets. You can now shop groceries using Deliberry, or Amazon prime. Uber is moving into the home delivery market. Glovo brings everything home for you. MrJeff collects your clothes and gives them back clean and ironed. Wallapop lets you buy and sell second hand stuff from your neighbours, based on your location.

We are starting to outsource cleaning, ironing and cooking: we used to do it ourselves, or have a maid to do it, but now there are specialised services. This is also related to the servitisation trend, where instead of owning a car or a bike, we rent it by the hour. This specialisation / servitisation evolves in a new spatial distribution of activities. By the way, it could actually be a good thing for the environment.

I was recently invited to teach at the University of Sassari, in Alghero, Sardinia, by professor Plaisant. Amazing place, and really interesting discussions. I there realised how much these trends are mainly urban. This spatial redistribution happens within the city. The rural areas are almost totally excluded. They don’t receive Amazon Prime or Glovo, they can’t buy food to be delivered at home. This explosive trends towards home delivery is excluding those areas which could actually most benefit from it. This could be one important component of this deep cultural divide that became apparent in the US elections.

This is nothing new, but prompts two questions:

  • can we build a peripherality index  by scraping delivery fees and conditions from home delivery services?
  • can we build sharing economy apps around the needs of rural areas, where for instance residents of the countryside run their own delivery services which become interoperable with existing home delivery services? A kind of last mile shared delivery?

And let’s not forget that overlooking the needs of those in rural areas can be very, very dangerous.

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Beyond startup-corporate collaboration: midcaps as the missing link

As I pointed out in a previous post, the startup culture is now percolating into large corporations. Virtually all large companies have collaboration programs, from formal collaboration to co-working to competitions.
Nesta has published two interesting reports addressing the main types of collaboration and the related bottlenecks (see image below).
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Governments have also promoted this kind of partnership as a way to for startups to grow. Rather than focussing on creating new large companies from scratch, recent efforts in Europe have focussed on matchmaking between large corporates and startups, for instance in the context of the Startup Europe Partnership. Collaboration is important for startups in order to scale, and for large corporates in order to innovate in traditional sectors and avoid being out-competed by new players.
This is certainly commendable, but is it enough? Large corporates are important, but they represent only a fraction of the economy. We can’t overlook the fact that a key role in Europe is played by smaller, more traditional midcaps companies, especially in traditional sectors such as manufacturing. Imagine for instance how big data startups could leverage the huge amount of data gathered by sensors present in most industrial machinery to develop predictive maintenance models.
This is even more worrying since, contrarily to large corporations, most midcaps lack the awareness and skills to establish and manage collaboration with startups.
How can we help startups to partner with the core traditional players of the economy? Is there any experience and lessons learnt worth sharing?

How can we make #scaleup support services in EU work better together?

Screen Shot 2016-11-11 at 10.06.28.png

According to the recent Global Accelerator Report, Europe is on par with North America in terms of accelerators and support services to startups, with 113 accelerators against 111 in North America. Those accelerators support a similar number of startups (2968 vs 2574).

Yet when it comes to output, the EU performance is not  satisfactory. In 2015 there have been 33 exits from European accelerators, against 193 in US.

Accelerators are just an example. There is no doubt that European support services to startups remain too fragmented and in some cases even redundant. Should every city have independent incubators? Has Europe gone crazy for accelerators? There could be both efficiency and effectiveness gains from greater synergy.

We need:

  1. a comprehensive map or census of support services.
  2. a “federation roadmap” for those services to better work together.

Regarding the first point, what are good examples of “mapping” exercises, such as the mentioned Global Accelerator report? What other support services are there that must be considered?

Regarding the second point, are there inspiring examples of federation of services? I personally know for instance the Climate Information Brokers initiative, which brings together 150 key players in the field of Climate Change in order to reduce redundancy and improve the effectiveness of their services. Could this provide a blueprint for startup support?

And when it comes to collaboration, how do we deal with “Not Invented Here” syndrome and turf wars? How do we ensure that public and private investment in support services is not creating a bubble?

The future of startups is no startups

Where will we be in 10 years when it comes to startups and scaleups in Europe?

Well, let’s start by looking backwards. Where were we in 2006?

In 2006 web 2.0 was just starting. I can still remember my then boss circulating an email in late 2005 about the importance of the yet unknown site called Youtube. Startups were certainly NOT on the agenda of policy-makers. Still under the effect of the dotcom bust, I remember some senior civil servants referring to web companies as “parasites” of the telcos and the content companies, which were considered the “real companies”.

How things have changed. Today every country has a startup strategy. Politicians love to be in the middle of startuppers. So by 2026, we should expect startup issue to become dominating throughout all government policies, right?

No, I think ten years from now startups will disappear from the policy agenda. But not because of another forthcoming dotcom bust, or another disappointment with the economic impact of these companies.

Precisely for the opposite reason. Startup will not be important because the startup culture will have become pervasive. There will no longer be a distinction between incumbents and startuppers, because incumbents will incorporate the values of startups: business model experimentation, failing forward, disruption.

This is a bold statement, designed at stirring discussion. But it is also based on today’s weak signals.

At the macro level, large companies are trying to integrate the startup culture: by launching incubators, corporate venture capital, acquisitions, hackathons, self-disruption initiatives, and hosting co-working spaces. The example of how the sharing economy has disrupted strong established business model is too prominent to ignore.

At the individual level, there is no longer such thing as an “employee culture”. Firing is cheaper and easier than ever, and has happened even in the public sector during the austerity measures. Salaries are increasingly performance-related. There is widespread recognition that no job is safe. There is a fine line between a fixed post, a temporary post, a self-employed post and creating a company. It’s a continuum rather than an opposition between safety and risk.

In short, every company is changing into a startup, and every worker into an entrepreneurs.

Will we get there? Is it actually desirable to get there? What needs to be done to get there in a way that maximizes public value?

These are just some of the ideas to be discussed at the forthcoming SME Assembly, to be held in Bratislava next November 23rd-25th . But the discussion has already started in the Linkedin group. Look forward to hearing your ideas.

Why isn’t there an easy way to do this? #wouldntitbeniceif

I want to be able to draw immediately a pie chart of the structure of a word document. Ideally, in a dynamic way that allows me to click on a section and have it expanded. I had to make my own calculations in excel to do it.

wordschart

New report: the European #Crowdfunding market is loosing ground – with or without the UK

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In the context of our crowdfunding study, I am reading the recent market study on European Alternative Finance by the Cambridge Centre for Alternative Finance.

The overall data are surprising, in a negative sense. As you can see in the chart, Europe is now lagging far behind America and Asia.

  • The European market at 5.43 bn EUR is much smaller that the Americas (33.58bn) and the Asian (94.61bn).
  • It is growing more slowly (+92% against +248% and +366% respectively).
  • The pace of European growth is decreasing (+151% in 2014, 92% in 2015) while others are accelerating.
  • Even considering only the market leader in each continent, the UK grew much slower than the US and China.

I know that it is not correct to put in the same bucket North and South America, Asia and Pacific, but that’s the way it is in the report. And in any case, it does not change the story.

Is freer circulation of #data likely to lead to winner-takes-all markets?

If we free up more data, and enable data to circulate more, should we expect the emergence of new oligopolies such as Google? Is there a rich-getting-richer effect on data, and is it more likely to happen the more freely data circulates? Or is this concentration effect more likely to happen in a context where data does NOT circulate freely?

The analogy comes from a 2003 Clay Shirky comment on blogging, where he suggests that greater freedom leads to power law distributions:

In systems where many people are free to choose between many options, a small subset of the whole will get a disproportionate amount of traffic (or attention, or income), even if no members of the system actively work towards such an outcome.

 

There’s a thin line between groupthinking and scientific consensus

So, the evaluation report of IMF is out, and says all sorts of negative things about how the financial crisis in the Euro area was handled; basically that the stability of the Euro area was more justified by group thinking than by economic evidence.

This is a nice complement to the Chilcot report on the Iraqi war, recently published in the UK. They certainly shows the importance of policy evaluation. Taken together, both reports appear as a serious hit at “Blair-style” left wing parties, which are both pro-austerity and pro-american.

I haven’t read the report yet but I am fascinated by this accusation of group thinking as opposed to evidence. In fact, Kuhn shows well how, even in hard sciences, group thinking is an integral part of the scientific process. The evidence about the centrality of the sun was available long before Copernicus. The “paradigm shifts” are not simply caused by the evidence accumulated, but by a cultural shift of the scientific community.

So is the accusation legitimate? What is the line between group thinking and scientific consensus, especially in soft sciences? And where does the Washington consensus stand in this continuum?

Do we need better property rights on #data to enable greater sharing and reuse?

Raw data are not covered by IPR, while curated database are.

It is not clear who owns the raw data, across different sectors of the economy. As a farmer, data gathered by tractors are managed by the tractor provider, but who owns them? As a bank, data on ATMs technical functioning are managed by the ATM machine builder. As a consumer, data on my banking transaction are managed by the bank. And so on…

But property rights are the basis of capitalism. If you don’t establish ownership, you can’t buy and sell stuff.

So if it’s not clear who owns the data, then they will be not shared or sold or reused. Unless of course they are totally open data.

Interestingly, a similar problem is happening in science. One of the main barrier for scientists to share data is that there is no established format for data citation (as opposite to publication citation) and no practical application of it, so they will not gain but only loose by sharing data.

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